Yahoo Ain't Worth No $44 Billion
If you listen to Wall Street,
paying
$44 billion for Yahoo is the smartest idea since E=mc2. Google's stock is
down, and Yahoo is on the rise after Steve Ballmer's public pitch for the No.
2 search engine concern.
Let me toss some cold water on this little love-fest.
I don't see anything in the Yahoo portfolio that Microsoft doesn't already
have. It's kinda like Time magazine buying Newsweek, Coke buying
Pepsi or BP merging with Exxon -- just more of the same. Even worse, Yahoo
is on the decline (its market share and financials are more like Boo-Hoo
than Yahoo!).
Yahoo is, to a large degree, a legacy company. All its core offerings -- search,
e-mail, forums, news and IM -- have been around for years. Why spend $44 billion
to buy the past when you could invest that money in inventing the future?
This deal seems like a knee-jerk reaction to the Google threat. Instead of
building technologies that can outpace Google, Microsoft is hoping to buy a
company that has proven it can't keep pace. From a purely business standpoint,
maybe the Yahoo audience is worth that kind of cash -- but this isn't a deal
based on technical innovation. What do you think? Write me at [email protected].
Posted by Doug Barney on February 04, 2008